By: Christopher R. Moore, Esq.

The Servicemembers' Civil Relief Act ("SCRA"), 50 U.S.C. §§ 3901 through 4043, is intended to protect members of the U.S. Army, Navy, Air Force, Coast Guard, and Marine Corps from collections actions and foreclosures during their time in service.

The law protects servicemembers on active duty, activated reservists, and members of the national guard active for more than 30 consecutive days. Unlike the Fair Debt Collection Practices Act, the SCRA applies to all creditors, not just “debt collectors.”

The SCRA prevents creditors from obtaining default judgments against servicemembers while also allowing civil actions to be stayed at the soldier’s request or on the court’s own initiative. Lienholders, including HOA’s, cannot pursue non-judicial foreclosures, and, like other civil cases, judicial foreclosure sales cannot be awarded by default.

Importantly, the SCRA’s foreclosure protection applies to properties purchased prior to a servicemember’s active service, but not if the property was purchased while on the servicemember’s current period of active duty.

The SCRA also caps interest on pre-service debts at 6% during the period of service and for a year following discharge. Thus, an HOA that charges interest on unpaid assessments cannot charge more than 6% for assessments owed by an active-duty soldier if the property was purchased prior to deployment.

Perhaps most important of all for reservists, the SCRA allows activated reservists, or re-deployed active-duty soldiers, to terminate leases effective “30 days after the next rent payment is due.” 50 U.S.C. § 3955(d)(1).

The penalties under the SCRA mostly consist of reversing actions taken in violation of the statute or, in the case of excessive interest, refunds of overpayments. However, if a court finds that a creditor violated the statute knowingly, the creditor can face fines and imprisonment. 50 U.S.C. § 3953(a)(1)

Service members and their families who believe their rights under the SCRA have been violated should contact their local Armed Forces Legal Assistance office.

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